The video, first posted by the People’s Daily, shows a trainer asking the employees why they did not “exceed themselves” at training.
The trainer, Jiang Yang, then spanks them with what looks like a stick. Reports say he later also cut and shaved their hair.
Two executives at the bank have been suspended.
The incident took place at a training session for more than 200 employees at Changzhi Zhangze Rural Commercial Bank in northern China on June 18.
Jiang Yang has issued an apology, saying the spanking was “a training model I have tried for years” and had not been instigated by executives at the bank.
The video, which first surfaced on June 20, appears to have been taken by someone in the audience on a smartphone.
Jiang Yang is seen reprimanding eight bank employees on stage, asking them why they received the lowest scores in a training exercise.
The employees give answers including “I did not exceed myself”, “I did not co-ordinate with my team” and “I lacked courage”.
Jiang Yang then says “get your butts ready” and proceeds to spank them with what appears to be a thick piece of wood.
The footage shows at least four rounds of spanking, with one woman recoiling each time, apparently in pain.
At one point, that women places her hands over her behind, but is told to “take your hand off”.
The spanking was followed by a “hair cutting punishment”, a statement by the Changzhi local government said.
Chinese media reports said the men had their heads shaved, while the women had their hair cut.
According to the statement, the Shanxi Rural Credit Co-operatives Union, which regulates the bank, has set up a group to investigate the incident.
The Rural Commercial Bank’s chairman and deputy governor had been suspended for “failing to strictly check the content of the course”, the regulator said, while the bank would help the employees seek compensation from the training company.
Jiang Yang has issued a video apology, and said the spanking had “nothing to do” with the leaders at the bank. Such rumors “had severely harmed his clients and the leaders” at the bank, he added.
People online have been expressing outrage over the treatment of staff.
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